Exchange rate dynamics of emerging and developing economies: Not all capital flows are alike

Nguyen, Thong Trung; Nasir, Muhammad; Vo, Xuan Vinh

doi:10.1002/ijfe.2724

Cited by 2 publications

(1 citation statement)

References 38 publications

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“…McCloud et al (2023) report that the interaction between exchange rate and FDI could be influenced by government stability. Nguyen et al (2024) claim that all capital flows should not be treated alike. Based on the composition of capital flows, the relationship between exchange rate and FDI flows could vary.…”

Section: Empirical Literaturementioning

confidence: 99%

How Does the Exchange Rate and Its Volatility Influence FDI to Canada? A Disaggregated Analysis

Lajevardi,

Chowdhury

2024

JRFM

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This study investigates the relationship between the real effective exchange rate (REER) and its volatility with the net inflow of foreign direct investment (FDI) to Canada, placing a novel emphasis on sector-level analysis. The study utilizes time series data from 2007 to 2022 and employs the autoregressive distributed lag (ARDL) approach to assess short-run and long-run relationships between the said variables. The findings reveal significant impacts of changes in REER, its volatility, and GDP on net FDI in the short run, with lasting effects of REER and its volatility, lagged GDP, and trade openness on FDI in the long run. At the sectoral level, FDI inflows in energy and mining, manufacturing, finance, and insurance exhibit significant sensitivity to changes in REER. Simultaneously, the volatility of REER has a significant impact on FDI inflows in manufacturing industries and the finance and insurance sector in the short run. In the long run, REER exerts a significant influence on the net FDI inflows in energy and mining, as well as manufacturing industries. The asymmetry in findings suggests a need for sector-specific attention to retaining and attracting FDI to Canada.

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Section: Empirical Literaturementioning

confidence: 99%

How Does the Exchange Rate and Its Volatility Influence FDI to Canada? A Disaggregated Analysis

Lajevardi,

Chowdhury

2024

JRFM

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Fixed/Floating Exchange Rate Systems, Health Crisis and Financial Markets of BRICS/Africa: Generalized Linear Model (GLM) Estimations

Umoru,

Hussaini,

Igbinovia

et al. 2024

brics-econ

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The fixed and floating exchange rate systems exhibit essential differences. The paper attempts to provide empirical clarification concerning the type of exchange rate regime that has the most favourable impact on stock market returns and prices of the BRICS and African markets using the GLM regression method. The results are based on the inverse Gaussian functions and also identity and 1og functions of the estimated generalized linear model. The fixed exchange regime impacted adversely and significantly on the stock prices of both stock markets. The floating regime impacted favourably and significantly on the stock prices of the BRICS and African stock markets at the inverse Gaussian and Gamma identities. Whereas the fixed regime impacted adversely on stock returns of the BRICS markets at Gaussian identity, it impacted positively but rather insignificantly on the performance of stock returns of African markets. For African stock markets, both the floating and fixed regimes impacted stock returns positively, but the impact of the fixed regime is significant and also of a higher magnitude compared to that of the floating regime (17.313>10.885) HIV and Covid-19 deaths have significant inverse effects on stock prices of African stock markets. For the BRICS markets, the effect of Covid-19 on prices and returns was negative but insignificant. Only stock return effect of HIV was adverse and significant for the BRICS markets. The research findings will be useful for financial marketers involved in international financial trade and seeking to align with developments in international financial markets.

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Exchange rate dynamics of emerging and developing economies: Not all capital flows are alike

Cited by 2 publications

References 38 publications

How Does the Exchange Rate and Its Volatility Influence FDI to Canada? A Disaggregated Analysis

How Does the Exchange Rate and Its Volatility Influence FDI to Canada? A Disaggregated Analysis

Fixed/Floating Exchange Rate Systems, Health Crisis and Financial Markets of BRICS/Africa: Generalized Linear Model (GLM) Estimations

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